Kimberly-Clark Announces Year-End 2009 Results and 2010 Outlook
4Q Net Sales Increased 8 Percent to $5.0 Billion; EPS of $1.17 Up 16
Percent
4Q Cash Provided By Operations Rose 48 Percent to $1.0 Billion
Company Resuming Share Repurchases and Planning For High Single-Digit to
Low Double-Digit Increase in 2010 Dividend
2010 Adjusted EPS Guidance $4.80 to $5.00, Up 6 to 11 Percent Versus 2009
EPS, In Line With or Slightly Above Long-Term Target
Company Reaffirms Top- and Bottom-Line Growth Objectives Through 2015
Diluted net income per share for the quarter was
Adjusted earnings per share in 2008 exclude charges for strategic cost reductions and an extraordinary loss. Additional detail on these items and further information about adjusted earnings per share and why the company uses this non-GAAP financial measure are provided later in this news release.
Chairman and Chief Executive Officer Thomas J. Falk said, "Our fourth quarter results completed a strong year for Kimberly-Clark. In 2009 we delivered excellent performance in the near-term while we maintained our strong focus on doing what's right for sustainable, long-term growth. Despite the difficult environment, we grew organic sales by about 3 percent in 2009. At the same time, we aggressively reduced costs, significantly improved profitability and delivered all-time record cash flow. In addition, we increased strategic marketing spending by about
Review of fourth quarter sales by business segment
Sales of personal care products increased 11.5 percent compared with the fourth quarter of 2008. Sales volumes rose 5 percent, changes in currency rates added another 5 points to sales, and higher net selling prices contributed 2 points of growth in the quarter, while product mix was off 1 percent.
Personal care sales in
In
In K-C's international operations in Asia, Latin America, the
Sales of consumer tissue products increased 0.9 percent in the fourth quarter. Although favorable currency exchange rates improved sales by 4 percent, sales volumes were down 2 percent and net selling prices were lower by about 1 percent.
In
In
In K-C's international operations in Asia, Latin America, the
Sales of K-C Professional (KCP) & other products increased 11.6 percent compared with the fourth quarter of 2008. Net selling prices rose 7 percent, favorable currency effects benefited sales by 5 percent and the acquisition of
Economic weakness and high unemployment levels in
In K-C's international operations in Asia, Latin America, the
Sales of health care products increased 22.1 percent in the fourth quarter. Growth was driven by a 13 percent increase in organic sales volumes and a 6 percent benefit from the acquisition of I-Flow Corporation, which closed in late
Other fourth quarter operating results
Operating profit was
The improved results included the benefits of organic top-line growth, input cost deflation and cost savings. Deflation in key cost inputs amounted to about
The overall currency effect on fourth quarter operating profit was essentially neutral in the fourth quarter in 2009 versus 2008. Translation gains totaled about
Other (income) and expense, net was
The company's effective tax rate for the fourth quarter of 2009 was 28.0 percent, decreasing earnings by about 8 cents per share compared to 2008 adjusted results. In the year-ago quarter, the effective tax rate was 22.4 percent and the adjusted effective tax rate, excluding the effects of charges for the company's strategic cost reduction plan, was 23.2 percent and included benefits from a number of tax matters. For the full-year 2009, the company's effective tax rate was 29.0 percent, consistent with the company's previous estimate of 28 to 30 percent. A reconciliation of the 2008 effective tax rate calculation is provided in a separate section of this news release.
Kimberly-Clark's share of net income of equity companies in the fourth quarter increased to
Net income attributable to noncontrolling interests was
Organization optimization initiative - update
As announced in June of 2009, the company initiated a plan to reduce its worldwide salaried workforce by approximately 1,600 positions by the end of 2009. This action was intended to further improve Kimberly-Clark's underlying profitability and cash flow and put the company in a better position to take advantage of future growth and innovation opportunities. Fourth quarter 2009 results included
Cash flow and balance sheet
Cash provided by operations in the fourth quarter of 2009 totaled
Capital spending for the quarter was
Full year results
For the year of 2009, sales of
Outlook
The company's key planning and guidance assumptions for 2010 are as
follows:
-- Net sales increase of 5 to 6 percent.
-- Organic sales are expected to grow 2 to 3 percent, driven by
volume
growth of 2 to 3 percent. Net selling prices and product mix are
anticipated to be even with the prior year.
-- The combined impact of the 2009 acquisitions of I-Flow Corporation
and Jackson Safety should benefit 2010 sales by 1 point.
-- Currency rates are expected to increase sales by approximately 2
percent. This assumes that rates are generally consistent with
fourth quarter 2009 levels with the exception of the Venezuelan
bolivar. Following the recent devaluation of the bolivar, the
company continues to evaluate the rate at which local currency
results in Venezuela will be translated into U.S. dollars in 2010,
but for current planning purposes has assumed a rate between 4.3
and 6.0 bolivars to the U.S. dollar. In 2009, about 3 percent of
K-C net sales were generated in Venezuela.
-- Adjusted operating profit growth of 7 to 11 percent.
-- Inflation in key cost inputs of $300 to $400 million. This
reflects estimated average market pricing for benchmark northern
softwood pulp of approximately $850 to $875 per metric ton and oil
prices averaging $80 to $85 per barrel for the year.
-- Savings from the company's FORCE program totaling $150 to $200
million.
-- Before any impact from the bolivar devaluation in Venezuela,
year-over-year currency translation benefits of $85 to $115
million
due to the strengthening of key foreign currencies versus the U.S.
dollar.
-- Pension expense of approximately $160 million across all company
defined benefit plans, a decrease of approximately $90 million
from
2009. Cash contributions to the plans in 2010 are expected to
total about $240 million versus $845 million in 2009.
-- Strategic marketing spending is planned to increase faster than
sales, supporting new and improved products, targeted growth
initiatives and overall brand equity.
-- The adjusted effective tax rate for the year is expected to be in a
range of 29 to 31 percent compared to the 2009 effective rate of 29
percent. The year-over-year increase at the midpoint is equivalent to
an approximate 1 1/2 point reduction in earnings growth.
-- The company's share of net income of equity companies is expected to
rise modestly compared to 2009's level, due to improved performance at
K-C de Mexico.
-- Capital spending should total $1.0 to $1.1 billion, in the lower half
of the company's long-term targeted range of 5 to 6 percent of net
sales.
-- A high single-digit to low double-digit increase in the dividend is
anticipated effective April 2010, subject to approval by the Board of
Directors.
-- Share repurchases are expected to total $500 to $600 million, subject
to market conditions. The company plans to begin repurchasing shares
in the first quarter of 2010.
-- The company will begin accounting for Venezuela as hyper-inflationary
effective January 1, 2010 and currently anticipates recording a
one-time after tax loss of $60 to $90 million (14 to 22 cents per
share) in the first quarter for the expected remeasurement of the
local
currency balance sheet in Venezuela as a result of the recent currency
devaluation. K-C's 2010 guidance for adjusted operating profit
growth,
the adjusted effective tax rate and adjusted earnings per share
excludes the impact of this loss and the company plans to report
adjusted results in 2010 that will exclude the impact of this item.
-- The company currently estimates that the ongoing impact of the January
2010 currency devaluation in Venezuela will not materially impact the
company's 2010 earnings per share.
Commenting on the outlook, Falk said, "The strength of our performance in 2009 gives us confidence that we will continue to execute our Global Business Plan well in the coming year. We are planning for a slow and modest economic recovery in 2010, and as a result, organic sales volumes are expected to grow 2 to 3 percent after being down slightly in 2009. We will continue to further strengthen our brands, pursue our targeted growth initiatives and reinvest for long-term success. We have a healthy pipeline of innovation coming to market this year, and we will support our new and improved products with increased marketing spending. We will also invest more to further strengthen our research and customer development capabilities to improve our future growth prospects. At the same time, we will remain focused on aggressively reducing costs and maximizing cash flow, which will help us overcome significant input cost inflation and enable our reinvestment plans. All-in-all, we expect adjusted earnings per share in 2010 will be in a range of
"Moreover, we will continue to deploy our cash flow in shareholder-friendly ways. We anticipate a healthy increase in the dividend this year, enabling us to maintain our top-tier payout ratio. In addition, because of our strong performance in 2009 and our confidence in our ability to generate strong cash flow going forward, we are resuming our share repurchase plan in 2010.
"Lastly, we have recently completed a review of our long-range Global Business Plan and have further sharpened our strategies and plans to facilitate the delivery of our existing top- and bottom-line growth objectives through 2015. Our annual growth targets remain 3 to 5 percent for net sales and mid- to high-single digits for earnings per share. We will continue to pursue targeted growth initiatives and further develop the key capabilities necessary for sustainable growth. At the same time, financial and cost discipline remain hallmarks of our Plan. We will provide more details around our Global Business Plan 2015 at K-C's 2010 Investor Day, which will occur on
Non-GAAP financial measures
This press release and the accompanying tables include the following financial measures in 2008 and 2010 that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as nonGAAP financial measures.
-- adjusted earnings and earnings per share
-- adjusted operating profit
-- adjusted effective tax rate
These non-GAAP financial measures exclude certain items that are included in the company's earnings, earnings per share, operating profit and effective tax rate calculated in accordance with GAAP. A detailed explanation of each of the adjustments to the comparable GAAP financial measures is given below. In accordance with the SEC's requirements, reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures are attached.
The company provides these non-GAAP financial measures as supplemental information to our GAAP financial measures. Management and the company's Board of Directors use adjusted earnings, adjusted earnings per share and adjusted operating profit to (a) evaluate the company's historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the company's business units and their managers.
Additionally, the Management Development and Compensation Committee of the company's Board of Directors has used the non-GAAP financial measures related to the strategic cost reduction charges when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the company's adjusted earnings per share and improvement in the company's adjusted return on invested capital determined by excluding the charges that are used in calculating these non-GAAP financial measures.
In addition, Kimberly-Clark management believes that investors' understanding of the company's performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing the company's ongoing results of operations. Many investors are interested in understanding the performance of our businesses by comparing our results from ongoing operations from one period to the next. By providing these non-GAAP financial measures, together with reconciliations, we believe we are enhancing investors' understanding of our businesses and our results of operations. Also, many financial analysts who follow our company focus on and publish both historical results and future projections based on nonGAAP financial measures. We believe that it is in the best interests of our investors for us to provide this information to analysts so that those analysts accurately report the non-GAAP financial information.
We calculated adjusted earnings, adjusted earnings per share, adjusted operating profit and adjusted effective tax rate for the quarter and year ended
--Strategic cost reduction plan. In July 2005, the company
authorized a strategic cost reduction plan aimed at
streamlining manufacturing and administrative operations,
primarily in North America and Europe. The strategic cost
reduction plan commenced in the third quarter of 2005 and was
completed as of December 31, 2008. At the time we announced
the plan, we advised investors that we would report our
earnings, earnings per share and operating profit excluding
the strategic cost reduction plan charges so that investors
could compare our operating results without the plan charges
from period to period and could assess our progress in
implementing the plan.
Management does not consider these charges to be part of our
earnings from ongoing operations for purposes of evaluating
the performance of its business units and their managers and
excludes these charges when making decisions to allocate
resources among its business units.
-- Extraordinary loss. In June 2008, the company
restructured contractual arrangements of two financing
entities, which resulted in the consolidation of these two
entities. As a result of the consolidation, notes receivable
and loan obligations held by these entities have been included
in long-term notes receivable and long-term debt on the
company's consolidated balance sheet. Because the fair value
of the loans exceeded the fair value of the notes receivable,
the company recorded an after-tax extraordinary loss on its
income statement for the period ended June 30, 2008.
Management does not consider this loss to be part of our
earnings from ongoing operations for purposes of evaluating
the performance of its business units and their managers and
excludes this loss when making decisions to allocate resources
among its business units.
-- Devaluation of Venezuelan bolivar and hyper-inflationary
accounting. The company will begin accounting for Venezuela
as hyper-inflationary effective January 1, 2010 and
anticipates recording a loss in the first quarter 2010 for the
expected remeasurement of the local currency balance sheet in
Venezuela as a result of the recent currency devaluation.
Management does not consider this loss to be part of our
earnings from ongoing operations for the purposes of
evaluating the performance of its business units and their
managers and will exclude this loss when making decisions to
allocate resources among its business units.
--Adjusted effective tax rate. In the analysis of its
effective tax rate, the company excludes the effects of
charges for the strategic cost reduction plan and the
estimated effect of the balance sheet remeasurement in
Venezuela. We believe that adjusting for these items provides
improved insight into the tax effects of our ongoing business
operations.
These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measure. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. The company compensates for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures. The non-GAAP financial measures should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
Conference call
A conference call to discuss this news release and other matters of interest to investors and analysts will be held at
About Kimberly-Clark
Kimberly-Clark and its well-known global brands are an indispensable part of life for people in more than 150 countries. Every day, 1.3 billion people - nearly a quarter of the world's population - trust K-C brands and the solutions they provide to enhance their health, hygiene and well-being. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds No. 1 or No. 2 share positions in more than 80 countries. To keep up with the latest K-C news and to learn more about the company's 138-year history of innovation, visit www.kimberly-clark.com.
Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's Web site on the same day they are filed with the SEC. To view these filings, visit the Investors section of the company's Web site.
Certain matters contained in this news release concerning the business outlook, including economic conditions, anticipated currency rates and exchange risk, anticipated impact of acquisitions, cost savings, changes in finished product selling prices, anticipated raw material and energy costs, anticipated benefits related to the organization optimization initiative, anticipated financial and operating results, revenue realization strategies, contingencies and anticipated transactions of the company constitute forward-looking statements and are based upon management's expectations and beliefs concerning future events impacting the company. There can be no assurance that these future events will occur as anticipated or that the company's results will be as estimated. For a description of certain factors that could cause the company's future results to differ materially from those expressed in any such forward-looking statements, see Item 1A of the company's Annual Report on Form 10-K for the year ended
KIMBERLY-CLARK CORPORATION
CONSOLIDATED INCOME STATEMENT
PERIODS ENDED DECEMBER 31
(Millions of dollars, except per share amounts)
Three
Months
Ended
December
31
---------
2009 2008
---- ----
Net Sales $4,982 $4,598
Cost of products sold 3,316 3,143
----- -----
Gross Profit 1,666 1,455
Marketing, research and general
expenses 974 817
Other (income) and expense, net (25) 15
--- ---
Operating Profit 717 623
Interest income 5 15
Interest expense (64) (80)
--- ---
Income Before Income Taxes and
Equity Interests 658 558
Provision for income taxes (184) (125)
---- ----
Income Before Equity Interests 474 433
Share of net income of equity
companies 48 21
--- ---
Net Income 522 454
Net income attributable to
noncontrolling interests(a) (30) (35)
--- ---
Net Income Attributable to
Kimberly-Clark Corporation(a) $492 $419
==== ====
Per Share Basis - Diluted
Net Income Attributable to
Kimberly-Clark Corporation(a) $1.17 $1.01
===== =====
Change
------
Net Sales + 8.4%
Cost of products sold + 5.5%
Gross Profit + 14.5%
Marketing, research and general
expenses + 19.2%
Other (income) and expense, net N.M.
Operating Profit + 15.1%
Interest income - 66.7%
Interest expense - 20.0%
Income Before Income Taxes and
Equity Interests + 17.9%
Provision for income taxes + 47.2%
Income Before Equity Interests + 9.5%
Share of net income of equity
companies + 128.6%
Net Income + 15.0%
Net income attributable to
noncontrolling interests(a) - 14.3%
Net Income Attributable to
Kimberly-Clark Corporation(a) + 17.4%
Per Share Basis - Diluted
Net Income Attributable to
Kimberly-Clark Corporation(a) + 15.8%
(a) Effective January 1, 2009, the Corporation adopted new
accounting requirements related to the presentation of
noncontrolling interests in consolidated financial statements.
Prior year amounts have been recast to conform to those
requirements.
N.M. - Not meaningful
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
(Millions of dollars)
Notes:
1. Charges for the Strategic Cost Reductions are included in the
Consolidated Income Statement as follows:
Three Months
Ended December 31
2008
----
Cost of products sold $12
Marketing, research and general
expenses 8
Other (income) and expense, net (14)
Provision for income taxes (6)
---
Net charges $ -
2. Organization optimization charges are included in the Consolidated
Income Statement as follows:
Three Months
Ended December 31
2009
----
Cost of products sold $3
Marketing, research and general
expenses 3
Provision for income taxes (2)
Net charges
Unaudited
KIMBERLY-CLARK CORPORATION
CONSOLIDATED INCOME STATEMENT
PERIODS ENDED DECEMBER 31
(Millions of dollars, except per share amounts)
Twelve
Months
Ended
December
31
---------
2009 2008
---- ----
Net Sales $19,115 $19,415
Cost of products sold 12,695 13,557
------ ------
Gross Profit 6,420 5,858
Marketing, research and general
expenses 3,498 3,291
Other (income) and expense, net 97 20
--- ---
Operating Profit 2,825 2,547
Interest income 26 46
Interest expense (275) (304)
---- ----
Income Before Income Taxes,
Equity Interests and
Extraordinary Loss 2,576 2,289
Provision for income taxes (746) (618)
---- ----
Income Before Equity Interests
and Extraordinary Loss 1,830 1,671
Share of net income of equity
companies 164 166
Extraordinary loss, net of
income taxes - (8)
--- ---
Net Income 1,994 1,829
Net income attributable to
noncontrolling interests(a) (110) (139)
---- ----
Net Income Attributable to
Kimberly-Clark Corporation(a) $1,884 $1,690
====== ======
Per Share Basis - Diluted
Before extraordinary loss $4.52 $4.05
----- -----
Net Income Attributable to
Kimberly-Clark Corporation(a) $4.52 $4.03
===== =====
Change
------
Net Sales - 1.5%
Cost of products sold - 6.4%
Gross Profit + 9.6%
Marketing, research and general
expenses + 6.3%
Other (income) and expense, net N.M.
Operating Profit + 10.9%
Interest income - 43.5%
Interest expense - 9.5%
Income Before Income Taxes,
Equity Interests and
Extraordinary Loss + 12.5%
Provision for income taxes + 20.7%
Income Before Equity Interests
and Extraordinary Loss + 9.5%
Share of net income of equity
companies - 1.2%
Extraordinary loss, net of
income taxes N.M.
Net Income + 9.0%
Net income attributable to
noncontrolling interests(a) - 20.9%
Net Income Attributable to
Kimberly-Clark Corporation(a) + 11.5%
Per Share Basis - Diluted
Before extraordinary loss + 11.6%
Net Income Attributable to
Kimberly-Clark Corporation(a) + 12.2%
(a) Effective January 1, 2009, the Corporation adopted new
accounting requirements related to the presentation of
noncontrolling interests in consolidated financial statements.
Prior year amounts have been recast to conform to those
requirements.
N.M. - Not meaningful
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
(Millions of dollars, except per share amounts)
Notes:
1. Charges for the Strategic Cost Reductions are included in the
Consolidated Income Statement as follows:
Twelve Months
Ended December 31
2008
----
Cost of products sold $43
Marketing, research and general
expenses 29
Other (income) and expense, net (12)
Provision for income taxes (24)
---
Net charges $36
2. Organization optimization charges are included in the Consolidated
Income Statement as follows:
Twelve Months
Ended December 31
2009
----
Cost of products sold $44
Marketing, research and general expenses 84
Provision for income taxes (37)
---
Net charges $91
3. Other information:
Twelve Months
Ended December
31
---------------
2009 2008
---- ----
Cash Dividends Declared Per Share $2.40 $2.32
December 31
-----------
Common Shares (Millions) 2009 2008
---- ----
Outstanding, as of 416.9 413.6
Average Diluted for:
Three Months Ended 419.2 416.3
Twelve Months Ended 416.8 419.6
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
(Millions of dollars)
Supplemental Financial Information:
Preliminary Balance Sheet Data:
-------------------------------
December December
31 31
2009 2008
---- ----
Cash and cash equivalents
Accounts receivable, net 2,554 2,492
Inventories 2,033 2,493
Total current assets 5,850 5,813
Total assets 19,182 18,089
Accounts payable 1,920 1,603
Debt payable within one year 610 1,083
Total current liabilities 4,910 4,752
Long-term debt 4,792 4,882
Redeemable preferred and common securities of
subsidiaries 1,052 1,032
Stockholders' equity 5,696 4,261
Twelve Months
Ended December 31
-----------------
Preliminary Cash Flow Data: 2009 2008
--------------------------- ---- ----
Cash provided by operations $3,481 $2,516
====== ======
Cash used for investing $(1,288) $(847)
======= =====
Cash used for financing $(1,788) $(1,747)
======= =======
Depreciation and amortization $783 $775
==== ====
Capital spending $848 $906
==== ====
Cash dividends paid $986 $950
==== ====
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
Description of Business Segments
The Corporation is organized into operating segments based on product groupings. These operating segments have been aggregated into four reportable global business segments: Personal Care; Consumer Tissue; K-C Professional & Other; and Health Care. The reportable segments were determined in accordance with how the Corporation's executive managers develop and execute the Corporation's global strategies to drive growth and profitability of the Corporation's worldwide Personal Care, Consumer Tissue, K-C Professional & Other, and Health Care operations. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. Segment management is evaluated on several factors, including operating profit. Segment operating profit excludes other income and (expense), net; income and expense not associated with the business segments; and the costs of corporate decisions related to the Strategic Cost Reductions. Corporate & Other includes the costs related to the Strategic Cost Reductions.
The principal sources of revenue in each of our global business segments are described below.
The Personal Care segment manufactures and markets disposable diapers, training and youth pants and swimpants; baby wipes; feminine and incontinence care products; and related products. Products in this segment are primarily for household use and are sold under a variety of brand names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and other brand names.
The Consumer Tissue segment manufactures and markets facial and bathroom tissue, paper towels, napkins and related products for household use. Products in this segment are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Hakle, Page and other brand names.
The K-C Professional & Other segment manufactures and markets facial and bathroom tissue, paper towels, napkins, wipers and a range of safety products for the away-from-home marketplace. Products in this segment are sold under the Kimberly-Clark, Kleenex, Scott, WypAll, Kimtech, KleenGuard, Kimcare and
The Health Care segment manufactures and markets disposable health care products such as surgical gowns, drapes, infection control products, sterilization wrap, face masks, exam gloves, respiratory products and other disposable medical products. Products in this segment are sold under the Kimberly-Clark, Ballard, ON-Q and other brand names.
Unaudited
KIMBERLY-CLARK CORPORATION
SELECTED BUSINESS SEGMENT DATA
PERIODS ENDED DECEMBER 31
(Millions of dollars)
Three Months
Ended December 31
-----------------
2009 2008 Change
---- ---- ------
NET SALES:
Personal Care $2,134 $1,914 + 11.5%
Consumer Tissue 1,655 1,640 + 0.9%
K-C Professional & Other 815 730 + 11.6%
Health Care 387 317 + 22.1%
Corporate & Other 15 17 N.M.
Intersegment Sales (24) (20) N.M.
--- ---
Consolidated $4,982 $4,598 + 8.4%
====== ======
OPERATING PROFIT(a):
Personal Care $436 $380 + 14.7%
Consumer Tissue 149 182 - 18.1%
K-C Professional & Other 119 101 + 17.8%
Health Care 56 45 + 24.4%
Corporate & Other(b) (68) (70) - 2.9%
Other income and (expense), net(b)(c) 25 (15) N.M.
--- ---
Consolidated $717 $623 + 15.1%
==== ====
Twelve Months
Ended December 31
-----------------
2009 2008 Change
---- ---- ------
NET SALES:
Personal Care $8,365 $8,272 + 1.1%
Consumer Tissue 6,409 6,748 - 5.0%
K-C Professional & Other 3,007 3,174 - 5.3%
Health Care 1,371 1,224 + 12.0%
Corporate & Other 53 79 N.M.
Intersegment Sales (90) (82) N.M.
--- ---
Consolidated $19,115 $19,415 - 1.5%
======= =======
OPERATING PROFIT(a):
Personal Care $1,739 $1,649 + 5.5%
Consumer Tissue 736 601 + 22.5%
K-C Professional & Other 464 428 + 8.4%
Health Care 244 143 + 70.6%
Corporate & Other(b) (261) (254) + 2.8%
Other income and (expense), net(b)(c) (97) (20) N.M.
--- ---
Consolidated $2,825 $2,547 + 10.9%
====== ======
(a) Organization optimization charges in 2009 are included by
business segment as follows:
Three Months Twelve Months
Ended December Ended December
31 31
2009 2009
---- ----
Personal Care $3 $47
Consumer Tissue 3 50
K-C Professional & Other 16
Health Care - 6
Corporate & Other 9
---
Total $6 $128
====
N.M. - Not meaningful
Unaudited
KIMBERLY-CLARK CORPORATION
SELECTED BUSINESS SEGMENT DATA
PERIODS ENDED DECEMBER 31
(b) Corporate & Other and Other income and (expense), net, include
the following amounts of pre-tax charges for the strategic cost
reductions.
Three Months Twelve Months
Ended December Ended December
31 31
2008 2008
---- ----
Corporate & Other $(20) $(72)
Other income and (expense), net 14 12
(c) Other income and (expense), net, includes the following amounts
of currency transaction losses.
Three Months Twelve Months
Ended December 31 Ended December 31
----------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Other income and
(expense), net $(1) $(20) $(110) $(18)
PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR
Three Months Ended December 31, 2009
------------------------------------
Organic Acquisition Total
Total Volume Volume(1) Volume
----- ------ --------- ------
Consolidated 8.4 2 1 3
Personal Care 11.5 5 - 5
Consumer Tissue 0.9 (2) - (2)
K-C Professional & Other 11.6 (3) 3 -
Health Care 22.1 13 6 19
Three Months Ended December 31, 2009
------------------------------------
Net Mix/
Price Other(2) Currency
----- -------- --------
Consolidated 2 (2) 5
Personal Care 2 (1) 5
Consumer Tissue (1) - 4
K-C Professional & Other 7 - 5
Health Care - - 3
Twelve Months Ended December 31, 2009
-------------------------------------
Organic
Total Volume
----- ------
Consolidated (1.5) (1)
Personal Care 1.1 2
Consumer Tissue (5.0) (3)
K-C Professional & Other (5.3) (8)
Health Care 12.0 12
Twelve Months Ended December 31, 2009
-------------------------------------
Acquisition Total
Volume(1) Volume
--------- ------
Consolidated - (1)
Personal Care - 2
Consumer Tissue - (3)
K-C Professional & Other 2 (6)
Health Care 2 14
Twelve Months Ended December 31, 2009
-------------------------------------
Net Mix/
Price Other(2) Currency
----- -------- --------
Consolidated 4 - (5)
Personal Care 5 - (6)
Consumer Tissue 3 - (5)
K-C Professional & Other 4 1 (4)
Health Care - - (2)
(1)Volume related to Jackson Safety and I-Flow acquisitions.
(2) Mix/Other includes rounding.
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
(Millions of dollars, except per share amounts)
NON-GAAP RECONCILIATION SCHEDULES
The tables on the following pages present the reconciliation of non-
GAAP financial measures to GAAP financial measures.
EARNINGS SUMMARY:
Three
Months
Ended
December
31, 2008
--------
Diluted
Income Earnings
Per
(Expense) Share
--------- ------
Adjusted Earnings
Adjustments for:
Strategic Cost Reduction
charges - -
Extraordinary Loss - -
Rounding - -
--- ---
Net Income Attributable to
Kimberly-Clark Corporation $419 $1.01
==== =====
Twelve
Months
Ended
December
31, 2008
--------
Diluted
Income Earnings
Per
(Expense) Share
--------- ------
Adjusted Earnings
Adjustments for:
Strategic Cost Reduction
charges (36) (.09)
Extraordinary Loss (8) (.02)
Rounding - .01
--- ---
Net Income Attributable to
Kimberly-Clark Corporation $1,690 $4.03
====== =====
OPERATING PROFIT SUMMARY:
Three Months Twelve Months
Ended December
31 Ended December 31
2008 2008
---- ----
Adjusted Operating Profit
Adjustments for:
Strategic Cost Reduction charges (6) (60)
---
Operating Profit $623 $2,547
==== ======
EFFECTIVE INCOME TAX RATE RECONCILIATION: Adjustments for Strategic
Cost Reduction charges
Three
Months
Ended
December
31, 2008
--------
As Excluding
Reported Adjustments
-------- -----------
Income Before Income Taxes
Provision for Income Taxes 125 131
Effective Income Tax Rate 22.4%
Adjusted Effective Income Tax
Rate 23.2%
Twelve
Months
Ended
December
31, 2008
--------
As Excluding
Reported Adjustments
-------- -----------
Income Before Income Taxes
Provision for Income Taxes 618 642
Effective Income Tax Rate 27.0%
Adjusted Effective Income Tax
Rate 27.3%
KIMBERLY-CLARK CORPORATION
PERIODS ENDED DECEMBER 31
OUTLOOK FOR 2010
Estimated Full-Year 2010 Diluted Earnings Per Share:
Adjusted Earnings Per Share
Adjustment for Venezuelan
Balance Sheet Remeasurement (.22) - (.14)
---- ----
Earnings Per Share - Diluted $4.58 - $4.86
===== =====
Estimated Full-Year 2010 Effective Tax Rate:
Adjusted Effective Tax Rate 29% - 31%
Adjustment for Venezuelan
Balance Sheet Remeasurement 1% - 1%
--- ---
Effective Tax Rate 30% - 32%
=== ===
For further information: Investors, Paul Alexander, +1-972-281-1440, palexand@kcc.com, or Media, Kay Jackson, +1-972-281-1486, kay.jackson@kcc.com, both of Kimberly-Clark Corporation Web Site: http://www.kimberly-clark.com